The Patins had been transferred to a new city and had to sell their home before leaving. They received a full price offer which included a warranty that the home had not been insulated with urea formaldehyde. Shortly before closing, the purchasers came by the home to measure the attic opening and discovered that the home was, in fact, insulated with urea formaldehyde. This was unknown to the Patins who had not asked or obtained a warranty when they purchased the home from a construction company several years before. As a result, the purchasers refused to buy the home and the Patins were forced to delay their move and incur considerable expense. The Patins sued the construction company for deceit, claiming that it had induced them to purchase that home but had kept the existence of the insulation secret. The Patins had inspected the house before they purchased it and their agreement specifically excluded any representations and warranties which were not expressly stated in the agreement. Discuss the nature of the Patins' claim and the defences, if any, which might be raised. What would be the likely outcome?

Based on Flynn v. Steve Butler Construction Ltd. (February 23, 1993), Doc. V01570 (B.C.C.A.).
This case examines the tort of deceit based on the principle of fraudulent misrepresentation. The Patins will argue that the construction company deliberately or recklessly misled them by failing to mention the insulation, of which it must have been aware, to induce them into the purchase of the home. The vendor ought to have known that this would be of material importance to their purchase decision. Damages would be based on the costs incurred as a result of the aborted sale of their home and the delay in moving to their new location. The construction company's defence will be that there was no intention to deceive the Patins and that its actions were simply a mistake amounting, at most, to a negligent misrepresentation and not a fraudulent one. At trial the court found for the plaintiffs and awarded damages. However, this was overturned on appeal. There was no evidence supporting a tortious intention to deceive even though the construction company was fully aware of the insulation at the time of the plaintiffs' purchase. The plaintiffs were not induced into the contract by negligent misrepresentation and, therefore, the tort of deceit did not occur.